What To Look For In Investments
There are three basic elements, in no particular order: First is the stable legal framework. This means that both tax law and regulating the activity of a company that does not change too often and it provides investment protection guarantees you do not for one year but for years. One is to know that still remain in your property owner and the other is to see that part of it goes into other hands in various forms (taxes, fees increasing and unstable, nationalization, etc.).
Second, investors should take a look at the GDP of the country and its pace (of growth, decline, and stagnation). It is one to see GDP growth of 7-8% and 9.3% even as it was in 2008 and another is to see that it becomes negative and decreases from quarter to quarter not hope to recover quickly, especially as main lever – INVESTMENT decreased from year to year and European grants have been absorbed very little. In this regard, a country that can receive impressive amounts of direct investment in the next 10 years, and on this basis the pace of GDP may reach 2.2% in 2012 and thereafter it will grow again, but will not reach at 2007-2008.
Third, investors should look closely at the public and private debt in GDP (see the European problem with sovereign debts). It is an important criterion followed by investors and becomes even more important as that country is solvent or not. If we get after being told recently by Khan – chairman of the IMF, as Romania is one of the countries might have difficulties to pay the debts incurred to date, it would mean to be already condemned to oblivion by foreign investors. However officials from the IMF views are contradictory and the perception of Saxo Bank is that Romania is better than other countries such as Portugal and Spain, without mentioning Greece and Ireland.
Among others, a very important criteria on choosing a target for investment is the political stability of any given country. It is an essential factor because it can affect non-existent business activity besides the element of trust offered legislative and economic stability, its continuity. Another important aspect is the situation of trade; of imports vs. exports; of demand versus offer, etc. It seems that the perception of foreigners is relatively good for Romania, especially in the latter part exports rose and lower trade deficit. Positive is that these exports are mostly in Europe and especially in Germany, a country that has managed to recover quickly from recession.
Another was the situation if we had exported more than a country such as Greece or Portugal, Spain, which have financial problems of payment of foreign loans. Last, but not least, investors should also look at the population structure and its evolution. It goes without saying that one needs to know whose consumption is domestic demand and ask for what depends on this and the time evolution.11